Cotton prices have headed steadily south in the last two months, ending July at 67.19 cents, more than 7 cents per pound lower than at the end of May, or about 9.7%, according to data from the U.S. Department of Agriculture (USDA).
The seven-market U.S. average cotton spot price, which ended 2016 at just above 69 cents per pound, has fallen by two cents so far this year.
As the 2016/2017 crop year comes to a close, it is interesting to note that U.S. cotton exports have been much stronger than originally estimated by the USDA, primarily due to tight supplies in India and Pakistan.
Despite monthly increases to the current crop year harvest forecast, mill consumption has kept pace, keeping prices relatively stable.
Both production and consumption are expected to increase next year which, together with relative strong demand for exportable cotton, should help support current price levels in the near future.